Nonprofit vs. For-Profit Assisted Living: What’s the Difference?

Updated

Certified Care Manager, Aging Life Care Professional, and National Master Guardian Emeritus

As you begin your search for the best living facility for yourself or your family member, you may have a choice between a nonprofit and for-profit assisted living community. In other cases, you won’t have a choice at all due to the area where you live. When deciding between a nonprofit vs. for-profit assisted living facility, it will help to understand the differences between the two to make an informed choice.

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As we explain how assisted living facilities run their communities, decide on staffing, and offer amenities, accept that one won’t necessarily be better than another. You will want to conduct your investigation into any assisted living without regard to their affiliation or profit status so you can identify the qualities that are important to you. 

Are All Assisted Living Facilities Nonprofit?

On the contrary: most assisted living facilities are for-profit. But the nonprofit assisted living sector is gaining ground. Chances are, you’ll have far more choices in the for-profit sector of assisted living communities. According to the CDC, approximately 81% of senior residential properties were for-profit. 

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What’s the Difference Between a For-Profit and Nonprofit Assisted Living Facility?

There are significant distinctions between for-profit and nonprofit assisted living facilities, but you may not notice those differences from the outside looking in. The structure, funding sources, mission, and values differentiate the two, but that doesn’t mean one provides better care than the other. To choose between the two entails identifying what is important to you and your family. 

Doing your due diligence regardless of ownership is crucial to making a good decision. Just because an assisted living facility is nonprofit and mission-driven doesn’t mean they always give good care. Likewise, a for-profit option might offer exceptional care.

1. Organizational structure

The organizational structure between for-profit and nonprofit assisted living is very different. Understanding how and why each organization is run will give you a better view of the potential details of care and amenities.

Nonprofit status

With any nonprofit organization, the IRS grants tax-exempt status because they further a cause or public benefit. A nonprofit is run by a board of directors or a board of trustees. The board’s priority is governance consistent with the organization’s mission and values that are sound and ethical. The board hires and oversees the CEO or director of the assisted-living facility. 

Nonprofit organizations are also eligible to raise money from individual and corporate donors. These gifts are tax-deductible, and nonprofits can also apply for particular government and private grants. 

A nonprofit facility will charge a fee, just like a for-profit assisted living, but profits are put back into the community. Charitable or religious organizations run most nonprofit assisted living communities. The largest nonprofit organization in the country is National Senior Campuses, which has no faith-based affiliation, followed by Evangelical Lutheran Good Samaritan Society.

In most cases, it is unnecessary to belong to the affiliated religious organization, but for many residents, this is an appealing characteristic of nonprofit assisted living communities. Shared values and support for those values are a driving force behind choosing this type of assisted living. 

For-profit status

For-profit assisted living facilities are businesses that have the purpose of generating profit, and therefore they are taxed. The profit generated after expenses goes to the owners and stakeholders. Many for-profit assisted living facilities are owned and run by large corporations with hundreds of properties across the country.

Frequently, there are investors to whom these communities must answer and be accountable. For-profit assisted living communities often also have mission statements and shared values, but the bottom line is to make money.

2. Amenities

You may wonder how a profit status affects amenities. Larger corporate organizations can offer more amenities such as high-tech options and faster internet or more diverse food options. The assisted living arena is highly competitive, and for-profit organizations may have a greater incentive to respond to the market with the types of services and amenities that the growing aging population says they want.

Nonprofit senior communities may focus more on faith-based and cultural activities to satisfy their residents. As the market share of nonprofit communities increases, they are starting to look at various amenities that will attract residents. Offerings include swimming pools, state-of-the-art gyms, outdoor options like pickleball and tennis. Some nonprofits also have healthcare relationships with hospitals, home care, and home health agencies. 

3. Continuing care retirement communities (CCRCs)

At this point, many nonprofit assisted living options are CCRCs. Presumably, this is because a CCRC offers a diversity of living options. CCRCs are typically buy-in for a lump sum plus monthly fees. CCRCs provide independent, assisted, and memory care, and in some cases, nursing home care as well. A CCRC’s structure can be complicated, so make sure you understand the financial commitment before agreeing. 

4. Size

Generally speaking, for-profit communities are larger with more rooms and, therefore, more paying customers. Nonprofit communities might be smaller since they are not concerned with a profit motive.

5. Staffing

Staffing is a big concern in any assisted living facility. Depending on the for-profit ownership, it may cut staffing to the minimum to maximize profit. At the same time, funds available for staffing a nonprofit facility can be more limited, leading to staffing shortages here, as well. Both nonprofit and for-profit residences can offer superb care if they’re fully staffed with capable employees.

The other issue related to staffing has to do with pay and benefits for care staff. On the one hand, a larger corporate senior living model might be able to offer a good benefits package. For nonprofit communities, allocating better pay and benefits may be consistent with their values and mission, but they may be limited in what they can actually provide. 

6. Cost

If you’re deciding between nonprofit and for-profit assisted living, you might be surprised that the cost difference is negligible. Paying for assisted living is a huge concern for many families, so don’t assume that a nonprofit will cost less. However, there might be the added benefit of charity care at a nonprofit assisted living community if you run out of funds. You can also pay for either type of facility using Medicaid if you qualify. 

Should You Choose a Nonprofit or For-Profit Assisted Living Facility?

Choosing between a nonprofit or for-profit assisted living is a personal decision dependent upon some of the same foundational principles that apply regardless of profit status. Let’s look at some of the factors to consider when deciding between the two.

  • Is a faith-based or charitable community important to you?

Many people prefer a community with like-minded people that share common values of faith, charity, and the common good. If this characteristic is essential to you, then a nonprofit may fulfill that need.

  • What is the staff-to-resident ratio?

More staff usually translates to better, more attentive care. Ask about the staff-to-resident ratio in both types of communities. It might also be important to you to know how the employees are treated (such as their pay and benefits package), although this information may not be offered readily.

  • Amenities

Compare amenities of both for-profit and nonprofit communities. Some amenities, such as fitness and dining options, might be more critical. Or maybe social and faith-based activities are a priority. If you can, prioritize the essential amenities to help guide your choices.

  • Healthcare

Both for-profit and nonprofit facilities may have contractual relationships with healthcare companies. There are advantages and disadvantages to these arrangements. The advantage is that healthcare that’s in-house can come to you. The disadvantage is that you could feel as though you don’t have a choice, even though you can choose whatever company you want. 

  • Cost

Carefully examine the cost of both types of facilities. Specifically, ask about mandated monthly cost increases and expenses tied to the level of care that your loved one needs. If the nonprofit is a CCRC community, you’ll want to know about transitioning to higher levels of care and the costs associated with memory and nursing home care. 

  • Layout and accessibility

Larger for-profit facilities might have a broader range of room choices and locations. If your loved one has mobility or physical needs that require close proximity to services, you’ll want to consider the available room options.

  • Complaints

Talk with the local Ombudsman program to inquire about any complaints about the facility you’re considering. Treat both for-profit and nonprofit equally in your search.

Tips for Finding the Best Nonprofit Assisted Living Facility

If you’re confined to a specific geographical area, your choices could be quite limited. However, it’s not unusual for older adults to consider a nonprofit in another community that’s closer to family. You could have only one choice, but stack that choice against what could be several other for-profit facilities in the same area.

Call aging services

Your local area agency on aging may have a listing of nonprofit assisted living facilities. Many of the smaller communities may not do the type of extensive marketing that for-profit facilities can afford, so local aging resources are a good place to start your search.

Do an online search

Searching for “nonprofit assisted living near me” is worth a try. For-profit facilities may show up, so make sure you don’t get fooled into thinking a community is nonprofit when it isn’t.

Start with the largest nonprofit communities

Statistica’s review of the top nonprofit communities in the US is a good place to search according to the name of the charitable or faith-based organization. Many of these will be geographically confined to certain areas of the country. However, nonprofit organizations are developing more and more communities all the time.

Contact a senior living placement specialist

A local senior living placement specialist will have expertise in most of the assisted living choices in your community. Try to find a specialist that has been in business for several years since they will likely have more experience in families’ experiences in each location. 

Nonprofit vs. For-Profit Assisted Living: What’s the Difference

As you start your journey to find the best care for you or your loved one, try to approach your choices with an open mind. Prioritize your values, examine the quality of care, ask questions, and choose the living facility that is best for you and your family.


Sources:
  1. “Nonprofit Senior Living Model of the Future Emerges As Providers Expand, Diversify.” Senior Housing News. seniorhousingnews.com
  2. “Residential Care Communities.” Centers for Disease Control and Prevention. cdc.gov
  3. “nonprofit Senior Living Organizations by Living Units U.S. Statista. statista.com
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